What Is an Exit Strategy for a Hard Money Loan? An exit strategy is the plan for repaying a hard money loan before it matures. The most common exit strategies include selling the property, refinancing into long-term financing, or using proceeds from another asset sale. Because repayment depends on a successful exit strategy, Brighton Asset Management evaluates every borrower's proposed plan as part of its underwriting process.

How Do Investors Repay Hard Money Loans?: Hard money loans are typically repaid through one of two exit strategies: selling the property and using the sale proceeds to pay off the loan, or refinancing into longer-term financing with a conventional lender, DSCR lender, or other financing source. Before funding a loan, Brighton Asset Management works with every borrower to understand and evaluate their proposed exit strategy.

What Happens When My Loan Matures?: When a hard money loan reaches its maturity date, the outstanding principal, accrued interest, and any other amounts due must be repaid according to the loan documents. Borrowers should have a realistic exit strategy in place before the loan matures. If circumstances change, Brighton Asset Management encourages borrowers to communicate early to discuss potential options.

What if my Project Takes Longer Than Expected?: Construction delays, permitting issues, contractor scheduling, and unexpected repairs can all extend a project's timeline. If your project is taking longer than anticipated, contact Brighton Asset Management as soon as possible. Depending on the circumstances and the status of the project, loan extension options may be available.

Can I Refinance Out of a Hard Money Loan?: Yes. Hard money loans are designed to provide short-term financing. Many borrowers refinance into a conventional mortgage, DSCR loan, commercial loan, or other long-term financing once the property has been renovated, stabilized, or leased. Brighton Asset Management structures its loans with the expectation that borrowers will successfully execute their planned exit strategy.

Can I Pay Off My Hard Money Loan Early? Yes. Many real estate investors pay off a hard money loan before its scheduled maturity date after selling the property or refinancing into long-term financing. Brighton Asset Management does not have any prepayment penalty.

Are There Prepayment Penalties? No. Brighton Asset Management does not charge any prepayment penalties. Borrowers have the freedom to pay-off the loan at any point during the loan term.

Can I Extend My Hard Money Loan If Needed? Brighton Asset Management offers extensions for a fee. Borrowers should contact BAM as early as possible if they anticipate needing additional time, as proactive communication often provides more options than waiting until the loan has matured.

What Happens If I Can't Repay My Hard Money Loan on Time? If a hard money loan is not repaid by its maturity date, the loan is considered to be in default under the terms of the loan documents unless an extension or other agreement has been approved. Borrowers who anticipate repayment challenges should contact Brighton Asset Management as soon as possible to discuss their situation and determine whether any alternatives may be available.